I sincerely apologize for the special note I sent to you earlier today. My thanks go out to the large number of subscribers who wrote in asking what the heck I was talking about.  The entire message concerned VIX and I was trading VIX options, but when I told you about the trade I had made, I substituted an “X” where the “I” was in the option code.  The spread should have read:

 

BTO 1 VIX 23Nov16 21 call (VIX161123C21)

STO 1 VIX 23Nov16 15 call (VIX161123C15) for a credit of $2.50 (selling a vertical)

 

The good news is that this spread now has a natural price of a $2.65 credit, and you can probably get $2.60, a better price than I was so happy about collecting.  That would increase your return on investment from 71% on my price to 76% if you collected $2.60.

 

This may be a short time-frame for VIX to retreat to its historical 12 -14 level.  You might want to use the 18Jan17 series instead, although you would probably only collect $2.30 (natural price $2.35) which would result in a 62% gain on your investment (and maximum loss) if VIX is under 15 when those calls expire.  I sold a few of those spreads myself late today.

 

I apologize for my inarticulate fingers which typed out the incorrect underlying option code.  I guess they had a senior moment.

 

Happy trading, and remember to vote in 5 days.  It is your democratic duty.

 

Terry